Key Takeaways

• PSHB coinsurance percentages can seem reasonable at first glance, but the real costs often spike due to unpredictable service charges and billing structures.

• Understanding your plan’s coinsurance terms, billing practices, and how Medicare Part B coordination affects out-of-pocket expenses is crucial to avoiding unexpected bills.

Why Routine Medical Visits Can Become Financial Puzzles

If you’re covered under the Postal Service Health Benefits (PSHB) Program, you’re likely aware that coinsurance plays a significant role in how your medical bills are calculated. At a glance, a 10% or 20% coinsurance might sound manageable. But what does that really mean when you’re sitting in an exam room, receiving a routine test, or undergoing a specialist consultation?

The answer lies in the hidden math behind coinsurance: a formula that doesn’t always produce predictable results. While premiums are fixed, coinsurance is fluid, tied to the cost of care, provider billing rates, and your plan’s negotiated rates. This article explores why even seemingly minor services can result in confusing and costly bills.

What Coinsurance Really Means for You

Coinsurance is your share of the cost of a covered healthcare service, calculated as a percentage of the allowed amount after your deductible has been met. Unlike copayments, which are fixed amounts, coinsurance is variable. The exact cost depends on:

• The provider’s charge

• The PSHB plan’s allowed amount for the service

• Whether the provider is in-network or out-of-network

• Any deductibles you’ve already met

For example, if your plan has a 20% coinsurance rate for specialist care and the allowed amount is $300, you pay $60. But if the provider’s actual charge is higher than the plan’s allowed amount and they are out-of-network, you could owe significantly more.

The Role of Deductibles in Amplifying Coinsurance Costs

Before coinsurance even kicks in, you often must meet an annual deductible. In PSHB plans, in-network deductibles for low-deductible plans typically range from $350 to $500 in 2025. High-deductible plans can require $1,500 to $2,000 before coinsurance applies.

Once that deductible is met, coinsurance takes over. But here’s where unpredictability creeps in:

• Routine bloodwork, if coded incorrectly or performed out-of-network, can be billed at much higher rates.

• Imaging services like MRIs or CT scans can cost thousands, even if you’re only responsible for 20%.

• The deductible resets every January 1, so costs that seemed manageable late in the year can become unexpectedly steep early in the next.

Medicare and PSHB: A Key Factor in Reducing Coinsurance Burden

If you’re a Medicare-eligible annuitant enrolled in both Medicare Part B and PSHB, the two plans coordinate to limit your costs. Many PSHB plans waive or reduce coinsurance if Medicare is primary. For example:

• Medicare Part B typically covers 80% of outpatient services.

• The remaining 20% is often paid by your PSHB plan.

• In many cases, this coordination results in little to no coinsurance liability.

But if you decline Medicare Part B, or don’t enroll when required, PSHB becomes primary and you are responsible for the full coinsurance amount after the deductible. In 2025, this difference can significantly affect your financial responsibility.

In-Network vs Out-of-Network: A Cost Multiplier

PSHB plans generally offer lower coinsurance for in-network care. In 2025, this typically ranges from 10% to 30%, while out-of-network coinsurance jumps to 40% or even 50%.

What complicates things further:

• You may not always be aware whether a provider is in-network. Lab work, anesthesia, or imaging services performed at an in-network facility can be billed by out-of-network specialists.

• If you’re referred to a specialist outside the PSHB network, you’ll be responsible for a higher coinsurance rate, plus any balance billing.

Always verify network status beforehand, especially for procedures involving multiple providers.

How Routine Visits Add Up

Let’s look at routine care: a primary care visit, lab work, and possibly a follow-up with a specialist. If each provider applies separate billing rates, your coinsurance amounts will stack quickly:

• A $200 primary care visit with 20% coinsurance: $40

• A $400 lab panel with 30% coinsurance: $120

• A $600 specialist consult with 20% coinsurance: $120

That’s $280 out-of-pocket just for standard preventive care if deductibles are already met. If they aren’t, you pay full price until the deductible is satisfied.

Coinsurance After Hospitalization or Emergency Visits

After more serious care like hospitalization or emergency room treatment, coinsurance can become much more impactful. In 2025, PSHB plans typically require:

• 10% to 30% coinsurance for in-network hospital services

• 40% to 50% for out-of-network services

Even a short hospital stay costing $10,000 could leave you with a $3,000 coinsurance responsibility, depending on your plan. Some PSHB plans offer a cap on annual out-of-pocket costs, which helps, but that cap can still be as high as $7,500 (Self Only) or $15,000 (Family).

The Confusing Part: Allowed Amounts vs Billed Amounts

One of the most misunderstood aspects of coinsurance is the difference between billed and allowed amounts:

• Billed amount: What the provider charges.

• Allowed amount: What your plan agrees to pay based on negotiated rates.

You pay your coinsurance percentage based on the allowed amount, not what the provider bills. However, if you use out-of-network providers, you could be billed for the difference between these two amounts — known as balance billing.

This adds uncertainty to what you owe, especially when you don’t know the allowed amount ahead of time.

Preventive Services: Are They Really “Free”?

Under PSHB rules, many preventive services are supposed to be fully covered, such as:

• Annual physicals

• Screening mammograms

• Routine vaccinations

But problems arise when preventive services include additional testing, procedures, or discussions that are billed separately. For instance:

• A routine physical could trigger coinsurance if a chronic issue is discussed and coded differently.

• A screening colonoscopy that turns into a diagnostic procedure might no longer be 100% covered.

Understanding coding practices and billing breakdowns is essential, especially when aiming to avoid coinsurance surprises during routine care.

Pharmacy Costs and Coinsurance Confusion

Prescription drugs under PSHB plans often come with separate coinsurance tiers, especially for high-cost or specialty medications. In 2025, many plans include:

• A fixed copay for generics

• A coinsurance percentage (e.g., 20% to 30%) for brand-name or specialty drugs

Even with a Part D integration for Medicare-eligible enrollees, costs can be significant until the $2,000 annual out-of-pocket cap applies. For non-Medicare enrollees, the variability in pharmacy pricing and tiers makes estimating coinsurance costs difficult.

Why You Need to Review Your Explanation of Benefits (EOB)

The Explanation of Benefits is one of the few tools you have to decode coinsurance charges. Your EOB will show:

• What the provider billed

• What the plan paid

• What you owe (your coinsurance or copay)

• If any portion was denied or adjusted

Get into the habit of reviewing every EOB. Errors in billing, incorrect coding, or services being mistakenly processed as out-of-network can dramatically affect your out-of-pocket liability.

Tips to Reduce Coinsurance Surprises

If you want to make your coinsurance costs more predictable, here are practical steps to take:

• Know your deductible: Track how close you are to meeting it each year.

• Verify network status: Always confirm that every provider and facility is in-network before services.

• Ask for cost estimates: Request a pre-treatment estimate based on CPT codes and your plan.

• Coordinate with Medicare: If eligible, ensure you are properly enrolled in Medicare Part B to reduce your PSHB coinsurance costs.

• Use generic drugs: When available, opt for generics or plan-preferred medications to avoid higher-tier coinsurance.

• Stay within preferred providers: Some PSHB plans have tiers within their own networks that offer reduced coinsurance.

Understanding the Real Cost Behind Your Share

Coinsurance under PSHB may look simple on paper, but once you factor in deductibles, allowed amounts, network tiers, and real-world billing, the numbers tell a different story. Whether you’re a current USPS employee, retiree, or annuitant, taking time to understand the math behind your plan can help you prepare for care that doesn’t surprise you at the checkout window.

If you want help reviewing your PSHB plan options or need clarity on how coinsurance may affect you throughout the year, speak with a licensed agent listed on this website.